According to the Times of India, the ministry’s Central Economic Intelligence Bureau (CEIB), lately submitted a draft document that proposes levying an 18% goods and services tax on Bitcoin trading.
According to Cointelegraph, CEIB figures put the estimated Bitcoin transaction volume in India at over $5.4 billion. Therefore, the proposed 18% tax could see the government earning about $970 million from crypto taxation.
CEIB is also pushing for virtual currencies to be classified as “intangible assets” to fall under the purview of GST with taxes levied on the profits made from trading.
Tanvi Ratna, CEO of Indian crypto policy advisory firm Policy 4.0, tweeted:
“Sadly, this does not necessarily imply that crypto will be legal. Under Indian law, illegal income is also taxable & evading its tax counts as criminal activity.”
In fact, in 2011, India’s finance ministry provided clarification that tax evasion on illegal sources of income was a criminal offense. At that time, the government was allegedly moving toward reclassifying all forms of tax evasion as criminal offenses.